NMLS Test Practice Exam

NMLS Test – Practice Exam Price $49 $39

Course/Package Information
Number of Classes:1
Number of Lessons:1
Supplemental Documents:0
Time Allowed to complete course:90 days
Final Exam:Yes
This Package Includes the Following Courses:
Practice Exam – Practice Exam

This is a 100-question exam that replicates similar questions on the National Exam. The questions also include answers so that you understand why you answered something correctly or incorrectly. Taking this once should give you a solid data point that will tell you where you might place when you take the exam.
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National Exam Federal Law Intensive

NMLS Test Prep – Federal Law Intensive Access for 90 Days Price $69 $55

Course/Package Information
Number of Classes:5
Number of Lessons:30
Supplemental Documents:8
Time Allowed to complete course:90 days
Final Exam:Yes
This Package Includes the Following Courses:
Federal Law 100 – TILA
Federal Law 200 – RESPA and SAFE
Federal Law 300 – Credit and Information
S36 – Ethics 100 – Ethics, Fair Lending and Fraud
TP001 – SAFE National Exam Federal Law Intensive

Did you know that over 45% of the National Exam focuses on Federal Law? The section on Ethics, despite what it sounds like, is mostly focused on federal law. With the Federal Laws constantly changing, this is the hardest part of the test and deserves extra attention, which is why we focus on federal law in our education and why we offer this concentrated course that broadly covers this difficult topic.

This Federal Law Intensive Study Guide includes:

An abundance of comprehensive Federal Law Coursework!
Unlimited practice tests from our database of over 500 questions!
Each question you answer has explanations and links to the section where you can get the answer!

NMLS Test Prep – Federal Law Intensive Access for 90 Days Price $69 $55

National Exam General Study Guide

NMLS Test Prep – General Study Guide Access for 90 Days Price $79


Course/Package Information
Number of Classes:2
Number of Lessons:10
Supplemental Documents:0
Time Allowed to complete course:90 days
Final Exam:Yes
This Package Includes the Following Courses:
TP000 – SAFE National Exam Introduction
TP100 – SAFE National Exam Study Guide

This self study course includes learning materials to prepare you to pass the national component of the NMLS exam for Mortgage Loan Originators (MLO) required under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act).
The author will present all the issues and topics necessary for helping you achieve a passing score on the national test.
The materials for this course are presented at the most basic level for students who have not participated in mortgage lending activities. For experienced mortgage professionals, it will serve as a review and update of our rapidly changing industry. The student must invest on average another 24 hours of additional time to study these topics and review the sample exam questions to prepare properly to score well on the NMLS 100-question computerized exam for the national component. If you are seeking a license in a state that requires a separate state exam, you should study additional and separate course materials specific to that state test outline.
Quizzes and exercises within each chapter allow the student to measure his or her progress toward grasping the fundamental loan originator concepts. We strongly recommend also purchasing the 100-question practice exam. Once the student consistently answers over 90% of all the questions accurately, including the 100-question practice exam, he or she is ready to sit for the NMLS tests.
The course materials build on the central idea that all loan origination activities are conducted to help the customer find, select, qualify for, and successfully close the most suitable mortgage loan for their foreseeable financial needs. The key areas of knowledge include the federal laws that govern mortgage lending, the most common mortgage loan programs and products, and the complete loan origination process from initial contact with the customer through the post-closing steps. The most fundamental requirement for everyone involved in this process is to practice and promote ethical professional practices.

It is essential to read all eight chapters and remain focused on the terminology and key topics. The best way to prepare for the NMLS exam is to answer all questions at the end of each chapter. Spend additional time on the material you are having trouble answering, then re-take the end of chapter quiz.
At the end of the course, you should complete the 100-question final exam in your book. If you can answer at least 95% of the questions correctly, you should score well enough to meet the pre-licensure requirements. The questions throughout the book allow you to track progress toward achieving a satisfactory level of understanding of the material.
You will need a simple 4-function calculator (add, subtract, multiply and divide) throughout the course. It is a good idea to practice solving math problems on one of these because this is the only type that will be provided to you during the NMLS computerized exam.

Mortgage lending overview, Work of a loan originator,
Mortgage lender and mortgage broker, SAFE Act,
Basic terminology


General real estate and mortgage lending knowledge,
Overview of most common types of loans,
Primary and Secondary markets, terminology

Real Estate Settlement Procedures Act, Truth in Lending Act, HOEPA

Equal Credit Opportunity Act, Fair Credit Reporting Act,
FACTA, Red Flag Rules, Home Mortgage Disclosure Act,
Privacy Protection/Do Not Call, MDIA
All loan origination activities, Borrower qualification,
Verification of creditworthiness, terminology
Appraisal, Title, Insurance and Closing process
Closing Costs
Ethics in loan origination, brokering and lending
NMLS Test Prep – General Study Guide Access for 90 Days Price $79


Safe Act Mortgage Licensing

In order to enhance consumer protection, the Congress passed what is known as the Secure and Fair Enforcement for Mortgage Licensing Act or what is commonly referred to as the SAFE Act. The act provides the consumer with an enhanced protection through giving incentives to states, creating minimum standards for the registration and licensing of state-licensed mortgage loan originators also known as MLOs. Basically, it allows states to create their own standards for people who loan money against residential property. It also creates a nationwide licensing system for the nation’s residential mortgage businesses. This effort helps in setting the minimum standards that will be used for licensing and registration. Additionally, the Nationwide Mortgage Licensing System Registry provides consumers access to loan officer records to confirm they are licensed, the company they work for and contact information.

The Department of Housing and Urban Development known as HUD has assumed the role of providing notice and taking comment for rulemaking for the SAFE Act. First we will discuss provisional licensing and whether a state could issue licensing to mortgage loan originators who have yet to complete the testing and education requirements of the SAFE Act. These licenses will only be issued by the state once enough proof has been established, documenting that the minimum licensing standards have been met. A state may request and seek additional information even after a license is issued, or change its approval on existing information with regard to its accuracy.

Next issue discussed is whether or not to exempt someone who has been in the business of originating loans over an extended period of time from taking tests or attaining the education requirements. The regulators agreed to this through 2010, but in 2011 all would be required to participate no matter how long they have been doing their job. These individuals who this part of the law applies to, need to comply with the requirements of the new legislation and rules to maintain compliance with HUD.

States have a tendency to use different words or terms in many of their bills and legislation. The question is what happens if a state chooses to use another word other than “license” or “licensing” in their regulation? An example of words that might be used instead of license is “permit”, “authorization”, “certify” or “certification”. The answer is that if the term used has the same functional meaning, then it meets the SAFE Act’s minimum requirements, and states will be able to meet regulation standards set by the House and Senate to ensure protection for consumers.

In closing, the goal of Safe Mortgage Licensing system was to reduce law breakers who had a criminal history in one state, from moving to another. The major benefit of this system is the transparency created on a national scale, allowing identification of deceitful individuals and eliminating this illegal activity that they practice. This is done through a couple of checks including background checks, credit checks and finger prints on all loan officers that register, all of which are requirements for licensing. States will be required to have all applicants seeking a loan originator license to provide an authorization through the NMLS, to obtain a background check and credit report. MLOs will also be scheduled for finger prints to be taken by an approved provider and which will be sent directly to the NMLS. This helps to ensure that people who are seeking these licenses are less likely to have hidden agendas and gives the consumers better protection which is the primary objective of SAFE Act.

Check out Safe Act Courses and register for free tools to grow your business.

NMLS Florida

Before the passage of the new national SAFE Act standards for the mortgage industry, the State of Florida had set out to develop and implement stricter requirements for the purpose of licensing. The objective was to raise the professional standards to give the consumers better protection. Florida had developed its own checks including background, credit and finger printing. The state also established pre-licensing standards and continuing education along with testing. All of this was good but not enough to keep it from being one of the hardest hit states in the country with mortgage foreclosures. The main reason is the sharing of cross state information. Florida could not see originators’ history in the click of a button. This is a major benefit of Florida joining the National Mortgage Licensing System (NMLS). Florida was a target for reverse redlining which brought mortgage loan originators (MLO) nationwide looking to take advantage of its market. The state is proceeding, as now required by federal and state law, to raise the bar for anyone who wishes of working within the state’s mortgage industry to participate in the Florida NMLS.

Change has come with the bill passed in the Florida Legislature to implement new laws to allow Florida mortgage loan originators to use the national registry. Several changes have been made in relation to the SAFE Act. These changes were done with the intent of protecting the consumers and restoring their faith in the mortgage industry. These changes start with redefining the license types and the classification that goes with them.

To establish the new standards, all loan officers who are currently active in the mortgage industry need to reapply; this includes individuals, businesses and lenders. Furthermore, to obtain licensure status, a new set of minimum standards must be met. And to ensure safety and security, licenses are required to be annually renewed for continued licensure; this includes background checks, potential credit checks, and continuing education courses.

A brief look at the history of those with existing licenses shows many loan officers don’t possess the qualifications to keep their job which they have held for more than 20 or 30 years. This has continued and will continue to affect the growth and size of this industry, and has potential negative effects on competition. Existing and new loan officers will be required to take and pass with a score of 75 the national and state component test. Additionally, Florida originators will be required to successfully complete 20 hours of pre-licensing education and 8 hours of continuing education annually that follow the guidelines outlined by the NMLS and the State of Florida. To avoid a backlog for the transition, Florida allowed early applicants who applied to be granted temporary status while trying to complete the educational and testing requirements in 2010. Moving forward originators will have to successfully complete all requirements and be notified of licensure before beginning any origination activities.

Because loan officers are part of the national registry, state agencies, employers and federal regulators can view mortgage loan originator records. The registry allows verification of MLO status including successful completion of checks, education and tests to insure they are in good standing. Each step is done in order to attain high standards in mortgage loan originators obtaining or renewing their Florida license. This will be operated and reviewed by designated regulators.

It means that if an applicant did not have his licensing requirements met by the end of 2010, including successful completion of education and passing the National and State Component Tests, the applicant is getting a notice from the state licensing board asking him or her to get in compliance or to discontinue working. Like other industries, new regulations pave the way for change and alteration in landscape and in the players who participate.

Check out NMLS Florida courses or check NMLS section

NMLS Courses

There are two classifications of the coursework for the Nationwide Mortgage Licensing System. These are Pre-Licensing Education Courses which will be referred to as PE in the course catalogue and the Continuing Education Courses, or also known as CE courses. The courses are broken down by name, course number and the number of hours and category they belong to.

The courses for Pre-Licensing Education are broken down into six groups. Each contains different coursework and corresponding hours that need to be completed as part of the educational step in licensing. Let’s take a general over view of what is required and appears in the course categories.

Let’s start with SAFE Pre-Licensing Education Comprehensive Coursework as this will consist of 20 hours or more depending on state requirements. It is broken down as follows: three hours of federal law, three hours of ethics, two hours in non-traditional mortgage lending, and at least 12 hours of electives. These electives can be used towards a state requirement if applicable. The state-specific Pre-Licensing Education Comprehensive Course Groups are usually organized by the course titles which will include the word “comprehensive” followed by the two-lettered state code abbreviation. A course like this takes around 20 hours and is broken down similarly to that of the SAFE PE course material, plus state-specific education.

Continuing Education will play a big part in the effort to keep those who are already active in the mortgage industry because they must be re-certified annually to stay licensed. Individuals will need to take courses that cover basic requirements plus changing laws and industry updates. The SAFE CE Comprehensive Coursework breaks down this way; it has eight minimum hours, plus additional hours depending on state. The base eight hours must include three hours for federal law, two hours in ethics, two hours in non-traditional mortgage lending, leaving an additional one-hour elective which can be filled with state-continuing education if applicable. This leaves us to take a look at the state version of this process. It mirrors the SAFE course version, with the expectation of including state-specific education into the mix.

Also, there are a few other things to understand about NMLS courses, such as the classroom format and registration for a course. There are few formats for learning: a traditional classroom setting, and distance learning through something similar to a webinar where students go to one or more locations. All online pre-licensing courses use a required Learning Management System which is facilitated by an instructor. Optionally, there are online self-paced courses through these LMSs which are available for online-continuing education and pre-licensing education courses. These self-paced courses have what it is called “stopping points” wherein an instructor can do a knowledge check by reviewing a student’s work before proceeding to the comprehension of the material.

Registering for a course is simple. It requires you to make a selection whether its title or provider and to pay for the course. It is important when enrolling in a course that you have your NMLS ID to give the course provider. Having the NMLS ID allows course providers to share your results, so you get credit upon completion of your education. This will prevent troubles for you, your employer, and the regulators, by avoiding licensing issues from improperly applied education courses that didn’t reach your account.

The entire education process is designed to provide a minimum standard of knowledge to reduce the risk of future failure from lack of recommendations loan officers have. This will help ensure the consumer is protected and those handling mortgage loan originations understand what is at stake, better than before.

This outline of the NMLS education course requirements is a result of the Secure and Fair Enforcement for Mortgage Licensing Act. It is a requirement of the SAFE Act that state-licensed mortgage loan originators participate in this system to retain employment. All of these were projected to bring stability and standards to the mortgage industry.

Find approved NMLS Courses at 1stfreeuniversity.com

NMLS California

The rules established in California follow the national rules except for some of the state’s own additional standards which must be met in order to obtain certification to process mortgages. On January 4, 2010, the state began accepting filings through the Nationwide Mortgage Licensing System (NMLS). NMLS is part of the Secure and Fair Enforcement Mortgage License Act. It was designed so that the mortgage industry will have higher professional standards. This was considered after the collapse in the housing markets. Prior to the collapse, each state operated its own system for regulating the residential mortgage lenders and licensing practices. This practice resulted in varying degrees of standards regarding education, background checks, and testing.

With the new NMLS California registry consumers can check on their mortgage loan originator known to the system as a MLO. This ensures the MLO is registered at the Nationwide Mortgage Licensing System. This is beneficial for consumers by reassuring them that they are working with individuals who are in compliance with the national standards. Another benefit of this unified system is that it offers easy checking on loan originators’ past history. You can see where they have worked and if a license has been suspended in any state. This one feature should help reduce identity theft for consumers.

In the State of California, all mortgage loan originators must have their new license through NMLS California to continue operations in 2011. These steps are positive actions to aid the restoration of confidence and trust of the consumer and the companies they work for. The process starts with companies sponsoring their mortgage loan originator as employees. Prior to these changes many loan originators operated as independent businesses and were 1099 sub contractors. As part of the California Residential Mortgage Lending Act, individuals will only be approved, for what is known as a mortgage loan originator licensee, if a company is sponsoring them. This change will eliminate originators from working for multiple companies at the same time and the issues arising from this behavior, including privacy concerns, identity theft and loan flipping.

Aside from the application, there are several additional requirements that must be met before a license gets issued. First is taking a pre-license education course. Then, individuals must get a passing score of 75 for the National and the State of California’s component SAFE Act mortgage tests. Next, the applicant must complete a criminal background check which includes fingerprinting. MLOs must also authorize the NMLS to run a credit report to share it with the state of California which will review if the originator is conducting his personal finances and if applicable, business finances with same regard that would be beneficial to the financial health of the consumer. Finally individuals must be sponsored by a company which is registered and approved by the state through the NMLS.

Every location a company operates in California needs to have on-site management for the areas where the licensee conducts business. Moreover, each branch must have at least one manager who has a completed MU2 form and approved through the registry. A review of all filings and required documents will be carried out by the Department of Real Estate and the Department of Corporations, and communication will be made through the NMLS. These requirements are designed to step up the accountability in the mortgage lending industry and to provide safe guards for consumers. In closing, the Department of Real Estate will gain a new system which adds transparency and reduces time and cost with centralization. This should benefit all parties including mortgage loan originators.

1st Free University offers NMLS courses be sure to check out NMLS California courses

NMLS Test Preparation

All licensed mortgage lenders needed to apply for new mortgage licenses through the Nationwide Mortgage Licensing System (NMLS) if they did not possess an active license within the NMLS by December 31, 2010. This regulation was established to bring uniform minimum standards and guidelines to those who are involved with loan origination process. Having a better understanding of what is involved in this process and who it benefits is important in the preparation for testing.

Preparing to take any test requires being in the right state of mind. It also requires being prepared for the test and understanding the material. A good test preparation should be designed to see what you know and help you identify your comprehension of the material. You should find a test prep that covers the laws, rules, and regulations that go with mortgage licensing for supervised lending and mortgage brokering. Furthermore, it should have information relevant to the national component exam.

Finding test prep with good practice test exams is crucial to success on the national examination. To achieve this takes two parts. The first is a large question pool to allow for limitless combinations of questions. Remember the test is 100 multiple choice questions and you want to be able to simulate the experience before taking it. The second part of good test prep is the quality of questions. Are there multiple right answers but one is better? Are there single and double negative questions that use the words not or except.

One of the best ways to study for the test is to review the volumes of material systematically. You should look for material that has been organized in small sections. Understanding small blocks of information have proven to be more effective. Like building blocks, you are easily able to build on top of a strong foundation. One additional thing to look for when taking a test preparation course is the ability of the practice tests to tell you what you answered incorrectly and where to find the correct answer and reasoning as to why that is the correct choice.

Remember, find a course that allows for plenty of practice tests. A few weeks prior to taking the test you should create a habit of taking a couple practice exams a day. This will allow you to gain the confidence necessary to succeed through the repetition of taking exams and reviewing your results. Planning ahead also allows you to identify areas of weakness and study those areas. Being prepared and organized in the process with lead to success.

Prior to the test, the individual will need to have completed enrollment through the NMLS website for the desired testing location and paid the fees. You can begin the process by completing the registration process at the NMLS online website. An email will arrive notifying the registrant that the process has begun. While a test preparation course can give you an edge in passing the exam, there are educational requirements that must be met as well as additional requirements to completing the NMLS process. Each state that loan officers want to do business in will require its own state specific component exam. Some states do have an additional educational requirement beyond that which is required of the national level. These educational requirements can include pre licensing education (known as PE) and continuing education (known as CE).

In the event that you do not pass the exam, you have to wait 30 days to retake the exam. The exam cost $92 each time you take it. These tests have published passing and fail rates that are significantly higher than one would think. You need to get a 75 to pass the national and state exams. Great test preparation is recommended not only for the national component, but for each state component test as well.

Finding the right test preparation gives you the tools you need to be successful. With preparation that includes study guides, practice tests, and responses to incorrect test answers you can put yourself in a position to succeed. Getting the test behind you allows you to focus on what is really important, building your business and assisting your costumers.

Check out 1st Free University’s NMLS test preparation the new leader in testing success.

Regulation Z: Loan Originator Compensation

Regulation Z has been amended and there are changes that were added regarding loan originator compensation prohibitions. The rules came into effect on 1st April 2011 and because of their importance we will quickly look at these new regulations in a rather detailed manner.

The Department of Labor has given new interpretations of the Continue reading “Regulation Z: Loan Originator Compensation”